Will exempting foreign nannies from minimum wage boost Korea's birth rate?

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By Lee Hae-rin

A bill proposing bringing in foreign childcare workers and exempting them from the minimum wage payment system as a way of tackling the country's plummeting birth rate is facing a backlash for its alleged discriminatory stance against foreigners.

Rep. Cho Jung-hun of the minor opposition Transition Korea has proposed an amendment to the Act on the Employment Improvement of Domestic Workers.

"Korea is going through its worst birth rate crisis," the lawmaker said, "And we need a realistic solution for young people."

According to Statistics Korea, the country's birth rate has been on a steep decline since the 1970s ― 4.53 to 1.48 in 2000. The figure has continued to plummet to 0.78 in 2022. Korea ranks at the bottom among 38 OECD countries and its figure is lower than half of the OECD's average, which stands at 1.59, despite the government spending 2.8 trillion won ($2.1 billion) to fight the low birth rate over the past 16 years.

Rep. Cho Jung-hun / Courtesy of Rep. Cho Jung-hun's office

Cho believes the amendment will provide an affordable childcare solution to young married couples, which will cost around one million per month. He added that neighboring developed countries such as Singapore have already adopted a similar system ― since 1978 ― which supports women's economic activities.

The latest minimum wage announced by the Ministry of Labor and Employment is 9,620 won ($7.52) per hour, which is equivalent to a monthly salary of over two million won under the national 40-hour workweek standard.

Korea's Act on the Employment Improvement of Domestic Workers acknowledges housekeepers and nannies as part of the labor force and guarantees them pursuant rights, including minimum wage and four major insurances. Cho's amendment makes an exception only for migrant workers of foreign nationalities, as previously proposed by Seoul Mayor Oh Se-hoon in February.

However, the bill immediately triggered a fierce backlash from opposition parties that condemned the lawmaker for encouraging discrimination and exploitation under the pretext of tackling the nation's low birth rate dilemma.

The minor progressive Justice Party called Cho's bill "modern slavery" during a press conference, Wednesday. Shin Ji-hye, the spokesperson of the minor opposition Basic Income Party said in a press conference, "Today is the International Day for the Elimination of Racial Discrimination, designated by the United Nations and a bill amendment instigating racism was proposed today."

Civic groups and experts also expressed concerns over the potential human rights abuses that the bill could trigger.

"This bill tells migrant workers to work like slaves," Lee Han-sook, the director of Migration and Human Rights Institute told The Korea Times.

She explained that many domestic workers of Korean nationality already face labor issues and cannot be protected under the Labor Standards Act and exempting migrant workers, who are more vulnerable to labor rights protections, from basic rights such as minimum wage, will only lead to further violations.

Members of the Korean Domestic Workers Association (KDWA) and Korea YWCA hold a protest to demand labor rights for domestic workers in this June 15, 2017 photo. Korea Times file

"Minimum wage is, as it literally says, the minimum payment standard, which should be applied to all laborers working in the Korean territory, regardless of their nationalities," Lee Byung-hoon, a sociology professor at Chung-Ang University told The Korea Times.

"If we start making an exception for migrant workers based on their nationalities, it could become a precedent for future (discrimination)," the professor said.

As the amendment faced strong opposition, two Democratic Party of Korea (DPK) lawmakers ― Rep. Kim Min-seok and Rep. Lee Jung-mun ― who co-proposed the bill dropped out, Wednesday. As the National Assembly requires a minimum of 10 lawmakers' agreement to propose an amendment, two other People Power Party (PPP) lawmakers joined the bill, which is now supported by Cho and 10 PPP lawmakers.

As Cho explained, many neighboring developed countries in Asia, including Singapore and Hong Kong have been employing domestic workers from foreign countries at a lower cost. Also, he said that Au Pairs are common in some Western countries, including the United States, France and Norway, where young adults, mostly women, live with host families for up to two years undertaking childcare and basic housework in exchange for small "allowances."

However, under these systems, the underpaid workers are provided with accommodation and meals under the countries' labor laws. Depending on each country, the host families are required by law to cover travel to and from the workers' home countries and language classes.

The lawmaker is well aware that the proposed amendment "is not yet perfect" and lacks details on the migrant workers' labor conditions. However, he believes the migrant workers should be granted all labor and human rights, including accommodation and food, according to Choi Byung-hyun, the chief of staff at Rep. Cho's office.

Migrant workers and civic activists hold up placards during a rally held near Seoul Station, demanding better working and living conditions and the eradication of discrimination in this photo taken on Aug. 21, 2022. Newsis

"We welcome all opposition and criticism," Choi said, adding that Rep. Cho wishes the amendment to create a debate on the declining birth rate and develop a solid system where market logic can effectively meet the growing demands in childcare.

However, many still question whether the bill will provide a fundamental solution to fighting the declining population of the country.

"The low birth rate is a complex issue that has several causes: long working hours, undervaluation of domestic and childcare labor, and sexual discrimination," Lee Han-sook said. "To tackle the fundamentals of the problem, we must guarantee both men and women the right to childcare leave and reinforce the public childcare system," she said.

Lee Byung-hoon also believes bringing childcare to the public domain will help better solve the issue.

"What young married couples and women in their childbearing years want is the government's support, in areas such as public daycare centers and expansion of childcare systems," Lee said, "It (the solution proposed by the amendment) could instead lead to labor and human rights issues for the migrant workers," he said.